Godfrey Davis knows better than anyone who Mulberry’s loyal customers are. During his 10 years as chief executive, he successfully grew the luxury brand’s circle of followers. The allure of It-girl Alexa Chung and the handbag she inspired helped to propel the brand, and its sales, closer into the ranks of the elite luxury brands.
Then in 2012, under his new guise as chairman, he watched as those customers abruptly left, priced out by former chief executive Bruno Guillon’s disastrous strategy to push the brand further upmarket.
There were other troubles afoot. Following the exit of Emma Hill, Mulberry was without a crucial creative director. It had also rapidly expanded overseas to offset slowing growth at home. But without the brand recognition of some of its bigger rivals, it struggled to convince shoppers in Asia to step into its stores.
Now, almost a year after taking back the reins, Mulberry’s chairman believes steps taken to repair the brand are starting to bear fruit.
The Somerset-based group said yesterday that new and more affordable handbag ranges such as the Lily, helped sales at shops open for more than a year rise by seven per cent in the second half the year – a vast improvement on a 13 per cent fall in the first half.
“The price points at which we introduced products have been working well and we believe that we are seeing an upturn from our traditional customer, which is very much the mission we set ourselves out on,” Davis told City A.M.
He brushed off concerns that Mulberry had lost its focus by trying to appeal both to millennials and older shoppers: “It’s not really about age nowadays, its about attitudes. Our customer is typically a smart professional women – a quite self confident person looking for quality at a fair price. I think what we have done is to get that value to quality relationship right in the things that we have been doing over the last few months,” he said.
With Mulberry non-executive director Thierry Andretta named as chief executive last month, Davis will be able to step back into the chairman role. The fashion veteran, who has held senior roles as Lanvin, Moschino and the Gucci Group, officially took up the role this week and has already flown to the US and Asia to visit operations there.
However, Davis said there will not be a grand departure from the current strategy under his watch: “Thierry was on the board when we set the current strategy and is committed to it.”
“We have the excitement of a new creative director [Johnny Coca who joins in July] and I am sure that he will bring some great new products to the brand but I think the general strategy and brand positioning is something we are all very comfortable with,” he said.
Sales for the year to 28 March fell 10 per cent to £148m after a sharp decline at its wholesale business. But Mulberry said a tight control of costs would put pre-tax profits “slightly ahead of forecasts”. Analysts are forecasting profits of £4.7m, down 66 per cent on 2014.
With the worst behind it, Davis said it was beginning to find its sense of humour through campaigns like its quirky Christmas ad: “People are enjoying our brand more – they are getting more pleasure out of it.”